Sugar Cooperative Factories in Maharashtra have received a major relief after the Centre has waived income tax demands made on them since 1985. The decision came days after a number of representations made by the cooperative sugar sector to the Centre.
Recently, former union agriculture minister Sharad Pawar and former chief minister Devendra Fadnavis had separately met the union cooperation minister Amit Shah demanding a relief in income tax demands worth Rs 9,500 crore at the all India level of which Rs 8,000 crore were alone from Maharashtra cooperative sugar industry.
Cooperative sugar mills have been receiving income tax notices for paying a higher fair and remunerative price. They had demanded that the coercive action should be stopped and a direct hearing should be held for it. The price of sugarcane given to the farmers by the co-operative mills should be allowed as business expenses as a whole.
The cooperative sugar industry argued that any expenditure incurred by sugar factories towards purchase of sugarcane be deemed to be incurred wholly and exclusively for the purpose of their business.
Former Maharashtra Cooperation Minister Harshvardhan Patil thanked the Centre for taking a ‘’revolutionary’’ decision. On the other hand, the National Cooperative Sugar Factories Federation MD Prakash Naiknavare told the Free Press Journal, ‘’The Centre’s decision will give relief to the sugar industry which is going through the hanging sword of tax demands.”
The cooperative sugar industry had argued that sugarcane is under Essential Commodities Act and therefore the price of sugarcane that the farmer gets is controlled by the statute under which the prices are announced by the Centre and the state governments. That is binding on the sugar mills to pay that as a minimum price to the farmers.
‘’The mills in Maharashtra, parts of Karnataka and Gujarat predominantly in the cooperative sector which are established, managed and owned by farmers themselves were obviously paying over and above the government price in the years of good seasons. This additional price, which is over and above the government declared price, is being taxed by the I-T authorities and the accumulated outstanding amount on an all India basis has Rs 9,500 crore of Rs 8,000 crore from Maharashtra mills,’’ said director of a leading cooperative factory from western Maharashtra.
He said that the financial position of factories was not allowing them to honour the tax demand as the cooperative sugar industry had paid the additional cane price to the farmers 30 years ago and it is next to impossible to recover them from farmers.
